What is Niche Marketing?
Niche marketing is a marketing strategy that is geared toward a very specific segment of the market. Thus, it is also called concentrated marketing. Companies adopting this strategy focus on the specific target market that requires high-quality service and attention.
What is Niche Market? A niche market includes a particular customer group that has specific needs, and desires and seeks specific services. Such a niche market shares specific characteristics as against the whole market.
Due to the competition in the market and the variety of needs the markets have it has become impossible for firms to satisfy all types of consumer needs. Thus, it is better they should choose some specific consumer groups and satisfy them.
A niche market involves a particular target audience and a specialized offering, not always a tiny market. In order to provide the service that will most effectively satisfy the target market, a company must first try to understand the demands and preferences of the niche market.
By doing this, the business gains market dominance, making it possible for other businesses to enter that specific market. Suppose, your company sells shoes for all ages of men. Within this, you can further target the officers only, this is your specific target market i.e. niche market.
Requirements of Niche Marketing
In niche marketing, usually, the customers are rich and require high-end services. As the competition is not that stiff, brands can quote premium prices. The following three are the niche market’s main requirements.
- Customs should have a specific type of need.
- Customers should require special types of services.
- And, the marketers or brands should have specialized knowledge to serve the niche market.
Examples of Niche Marketing
A firm can grow in a variety of ways with successful niche marketing. By providing specialized services within a specific product, service, or market, businesses frequently stand out from the competition.
The following are some of its examples that further help you to understand how companies are adopting and implementing this marketing. Let’s take an example of Bugatti’s niche marketing.
The high-speed production cars made by Bugatti are renowned and well-known. The current fastest automobile in the world is a production model from the company called the Bugatti Chiron Super Sport.
Bugatti employs a niche market approach that primarily targets rich individuals with high earnings in western nations like Germany, France, and London. Bugatti cars are known for their beauty and speed.
Lamborghini company also elevates the niche market strategy. It also targets rich and wealthy people. Both Bugatti and Lamborghini use only premium and high-performance auto parts for design and manufacturing. And, they also design products as per the requirements of customers.
Lefty’s (Niche Market: Left-Handed People)
Targeting individuals via search engines and the internet is one of Lefty’s main techniques. As a result, an advertisement from Lefty’s is likely to appear when someone searches for “left-handed pens,” for example.
The focus of Lefty’s specialization is not a certain item. They offer a large variety of them for sale, and consumers of all ages can enjoy them. But what they do provide is quite narrow and geared toward a certain group: left-handed people.
Advantages and Disadvantages of Niche Marketing
The followings are some pros and cons that your company may get while adopting the niche marketing strategy.
- Low Competition – One of the benefits is that in the niche markets there usually exists low competition. As most companies are unaware of or unable to target the niche you are targeting your firm enjoys low competition.
- Premium Price – Consumers of niche markets require high-end services and are also competent enough to pay high prices. So you can easily quote premium prices to such customers.
- Good Relationships – In this marketing, companies are only focused on specific customers. Businesses will be able to cultivate their relationships with customers if they understand what that particular target market wants and provide for it.
- High Customer Satisfaction – Businesses can get to know their clients personally, which enables companies to better serve them.
- Adaptable to the Audience – Within this concentrated marketing strategy, companies can easily adapt to the changes consumers want.
- Small Market – One of the cons of niche marketing is that it is focused only on a small segment of the market. This may prevent your business to grow as the demand remains the same.
- Competition May Rise – If other companies see a good opportunity in your market segment and if there are no entry barriers competition will be higher in the coming days.
- Higher Risk – Since it only focuses on one or some specific market segment, if competitors overtake your strategy and reach out to the customers before you do, your company’s survival will be at risk.